Most popular goods chosen by agency to measure price pressures

(By Sandra Cordon)
(ANSA) - Rome, February 4 - Pre-grated cheese, home
pregnancy tests and electronic cigarettes have become so popular
in Italian society that they have been added to the 2014 basket
of most-frequently consumed goods used in inflation measures,
national statistics agency Istat announced Tuesday.

Demand and prices for the 1,447 products in this year's
basket are measured monthly by Istat to calculate price
fluctuations and inflation rates, and reflects changes in
consumer trends and habits.

The new basket, larger than the 2013 version which had only
1,429 items, now includes coffee pods and capsules for automated
coffee machines, online newspapers, packaged spreadable cheese,
and biodegradable bags for organic waste.

Even pro-biotic yogurt has become a new big thing among
consumers, replacing organic yogurt, the agency said as it aims
to "grasp the evolution of the spending behavior of consumers".

The list of items in this year's basket includes 19
different cereal and bread products, 10 sorts of alcohol
products, 11 household appliances and 26 kinds of cheese, milk,
yogurt and eggs.

Goods and services that are no longer included in the Istat
shopping basket include repairs for electronics, such as
computers and televisions; and women's suits, which have been
replaced by dresses.
At the same time, Istat adjusted the relative weighting
given to different products which is used to try to measure a
typical consumer's spending patterns.

Istat raised the relative weight of services over
manufactured goods in the basket by about one percentage point.

That reflects a widespread trend to spend more and more on
a range of services, from health spas and gyms to medical
procedures, cleaners for homes and automobiles, to consultants.

In fact, the price of services has been rising above prices
for manufactured goods in Italy for several years, the agency
said.

Spending on food and non-alcoholic beverages has been given
a higher weighting as well, while the weighting in
transportation, clothing, footwear and communications has been
reduced.

Istat, which adjusts the consumer basket each year, said
that the latest weighting in the basket reflects price movements
and consumer-spending trends in roughly equal proportions.

The changes come as Istat reported Italy's annual inflation
rate remained flat at 0.7% in January, compared with January
2013.

That was the same level as reported in December and
November 2013 and the lowest level since November 2009.

Italy's long recession has made it difficult for businesses
to increase prices, holding down inflation and raising concerns
about deflation becoming a problem in Italy.

A two-year run of falling gross domestic product (GDP)
ended in the third quarter of last year, when GDP was flat with
respect to the April-June period.

Measured on a monthly basis, Istat said prices were 0.2%
higher in January than in December.
The rise in overall costs of services in January included
increased costs for parking, municipal water and
trash-collection charges, as well as a sharp 1.9% jump in the
price of basic servicing costs due to new taxes introduced in
the 2014 budget.

Istat's basket of most-frequently purchased consumer goods
such as food and fuel dropped to 1.1% in January on an annual
basis, compared to 1.2% in December.
The Istat inflation surveys also include a regional
dimension.

In 2014, the territorial basis of the survey will include
80 municipalities (19 regional capitals and 61 provincial
capitals) to gain perspective on local taxes ranging from water
and garbage collection fees, taxi and public transit costs, as
well as schools and local services including cinemas and parks.